OUTRAGEOUS FACTS ABOUT THE DRUG COMPANIES
THE TRUTH ABOUT THE DRUG COMPANIES:
How They Deceive Us, and What to About It
by Marcia Angell,
(Random House; August 31, 2004)
The pharmaceutical industry claims to be a high-risk
business, but year after year drug companies have higher
profits than any other industry - by a long shot. In
2002, the top ten American drug companies had a profit of 17
percent, compared with 3.1 percent for the other Fortune 500
industries. The biggest drug company, Pfizer, had a
profit of 26 percent.
The industry claims to be innovative, but only a small
fraction of its drugs are truly innovative. Of the 78
drugs approved by the Food and Drug Administration (FDA) in
2002, only 17 contained new active ingredients, and only 7
were classified by the FDA as likely to be improvements over
drugs already on the market. Most of the others were
just minor variations of old drugs.
The most profitable drugs are variations of top-selling
drugs already on the market - "me-too" drugs. There are
whole families of me-too drugs, and no good reason to
believe one is better than another at equivalent doses. They
cash in on already-established, huge markets. The
top-selling drug in the world, Pfizer's Lipitor, is the
fourth of six cholesterol-lowering drugs of the same type.
The industry's most innovative drugs usually stem from
research done at government or university labs. An
internal National Institutes of Health (NIH) document showed
that only 1 of the 17 key research papers that led to the
five top-selling drugs in 1995 came from the company that
sold the drug. Big drug companies license or otherwise
acquire about a third of all their drugs from' universities,
the NIH, or smaller companies.
Contrary to popular belief, big drug companies spend less on
research and development (R&D) than they keep in profits and
far less than they spend on marketing. By their own
figures, in 2002 (when profits were 17 percent of revenues),
the top ten American drug companies spent only 14 percent of
revenues on R&D and 31 percent on marketing and
administration (of which the lion's share was probably
marketing). The industry claims to spend $802 million to
bring each new drug to market, but independent analysis
shows that the true figure is a small fraction of that
The U. S. is the only advanced country that does not
regulate drug costs in some way, and other countries spend
only about half as much for the same drugs as Americans.
Methods vary, but essentially governments in other countries
take advantage of their bargaining power to negotiate
prices. Still, drug companies do not sell at a loss in these
The pharmaceutical industry has an iron grip on Congress and
the White House. It has the largest lobby in Washington,
with more lobbyists than elected representatives, and it
contributes heavily to political campaigns. Over the past
two decades, Congress has enacted a series of laws that
practically ensure windfall profits to the pharmaceutical
industry, at public expense. For example, the Medicare
prescription drug benefit enacted in 2003 specifically
prohibits Medicare from negotiating for lower drug prices.
Drug companies promote diseases to fit drugs. To expand
sales, they persuade people in affluent countries that they
are suffering from conditions that need long-term treatment.
Thus, millions of normal Americans come to believe that
they have dubious or exaggerated ailments like "generalized
anxiety disorder," "erectile dysfunction," "PMDD," and "GERD."
The part of the FDA that approves new drugs receives half
its support from drug companies. The FDA reviews drugs
for safety and effectiveness before they are allowed on the
market, but drug companies pay large "user fees" in return
for quick reviews. That means the agency is beholden to the
industry it is supposed to regulate. .
New drugs are not required to be any better than old
ones, and there is usually no way to know whether they are.
Drugs have to be tested before the FDA will approve them,
but they do not have to be compared with older drugs for the
same condition, only with placebos. That means we don't know
whether new drugs are better or worse than old ones. They
just have to be reasonably safe and better than nothing --
a low standard indeed.
Drug companies have enormous influence over what doctor
are taught about drugs and what they prescribe. The
companies support most continuing medical education (CME)
courses, medical conferences, and meetings of professional
societies. They have armies of sales representatives to
visit doctors and teaching hospitals to tout their wares,
hand out free samples, and provide meals and other gifts.
There is ample evidence that this huge investment in medical
"education" pays off in terms of the prescriptions doctors
Drug companies have a lot of control over clinical trials
of their drugs, which makes drugs look better than they are.
They support much of the drug research done in academic
medical centers by faculty researchers. In return, they
insist on designing studies that increase the likelihood of
a favorable result. There is good reason to believe that
much of the company-supported research on prescription drugs
is biased as a result.
The pharmaceutical industry portrays itself as a model of
American free enterprise, but it is anything but. Of the
top ten companies in 2002, half are European. And while the
industry is free to decide what drugs to develop and to
price them as high as the traffic will bear, it is utterly
dependent on government-funded research and
government-granted monopolies in the form of patents and
FDAconferred exclusive marketing rights.
Even while the pharmaceutical industry turns out whole
families of me-too drugs for relatively mild conditions in
affluent people, it pays almost no attention to major
scourges in poor people -- like malaria. It also gives short
shrift to less profitable drugs. There are shortages of
some vaccines and life-saving drugs, such as antivenins for
poisonous snakebites; because few companies want to make